In a modern society, newspaper and magazine are two of the most important information media. They the main source of information for investors in developing investment strategies in stock market. If news from newspapers and magazines could always be efficient, accurate, timely in transferring information, it will have a positive impact on investors’ investment decision-making. Currently, there are two articles which held two different opinions about reasons leading to distortions of news report. Firstly, journalists and news organizations have their interest demands, so their reports may have information bias. Secondly, readers have their own preferences in reading news, thus they are more likely to believe in the content that they think is correct.

In “The Corporate Governance Role of the Media: Evidence from Russia”, the authors studied the influence of the coverage on the reputation of companies in Russia during 1999-2002. They found that if the news media announced earning news of companies, the stock price would be strongly influenced; the less incident reports about a company, the more reliable that a media (which reported the company) was, the more increase in the stock price there would be (Dyck, Volchkova and Zingales, 2008). Thus companies preferred to disclose those were favorable for them, to this end, companies spent a considerable amount of money on asking relevant media to disclose information in their favor. Similarly, companies also postponed the release of negative news as late as possible. Consequently, financial institutions often used financial news and advertisements to influence investors’ judgment on information.

The authors of The Market for News made an assumption: heterogeneity of readers will have an impact on accuracy of readers’ understanding reports. They explained two reasons for that. On the one hand, readers would choose those they believed to read, and they tried to verify what their expected; on the other hand, media tended to cater to this preference of readers by publishing the news that the majority of readers wanted (Mullainathan and Shleifer, 2005). According to this article, the Internet bubble is a good example. When the market was a bull market, financial companies would try to promote their financial investment products; however, when the market was at a the bottom, financial institutions turned to emphasize the safety of their investment products in avoid loss. As the great mass of readers has limited information about the market, they are more like to read news and information which is consistent with their taste.

In summary, these two articles put forward their analysis on why the information that investors had an access to would be deviated. The first article believed that it was cause by financial companies’ publishing selective news by their favors; the second considered that it was readers’ bias that led to imprecise information. Based on these two articles, the author of this essay thought that to solve the problem of distortion of information, it should first of all address problems in the following two aspects. Firstly, as far as news media is concerned, they should establish a monitoring and evaluation system, as well as cultivate professional ethics of journalists to maintain the authenticity, objective nature, neutrality and comprehensiveness of news reports, so as to eliminate the negative impact caused by false news, biased news, and one-sided news on investors. Equity-related news coverage should also include provision of warning on risk for investors. Secondly, from an investor's point of view, they should increase tier access to reliable sources of information to obtain more comprehensive and real news as much as possible. Investors should improve their ability to analyze and identify information offered by media, by rational and objective analysis to find out the real favorable news or bad news, therefore providing a reliable basis for making their investment decisions.